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This Practice Note outlines the law concerning criminal recklessness. The subjective test for recklessness Certain statutory and common law offences allow the prosecution to prove mens rea through ‘recklessness’. Put simply, recklessness is where the accused takes an unjustified risk that results in unlawful harm or damage. The House of Lords in R v G reaffirmed the subjective approach to recklessness. Before R v G, two distinct tests were used, depending on the offence charged: Subjective recklessness from R v Cunningham: the prosecution had to establish that the accused personally foresaw the risk. Objective recklessness from R v Caldwell: the prosecution only needed to show that the risk would have been obvious to a reasonable person, without proving the accused themselves foresaw it. In R v G, the House of Lords concluded that the objective test could operate unfairly where a defendant did not foresee the
This Practice Note examines the remedy of rescission, explaining when and in what manner a contract can be unwound (at common law, in equity and under statute) and thereby terminated and brought to an end. It covers the consequences and effects of rescission, the principal grounds for setting aside an agreement (misrepresentation, mistake, undue influence, duress, non‑disclosure, fiduciary misdealing and bribery) and the main obstacles to claiming rescission—affirmation, the intervention of third‑party rights and the impossibility of restitution. For further guidance on rescission in the context of misrepresentation, see Practice Note: Misrepresentation—rescission as a remedy. There are many ways in which a contract may reach its end; see: Terminating contracts—how and when a contract ends—overview for a brief and accessible summary, with links to the related further practical guidance, including Practice Note: Termination and expiry of contracts. For a table
What is a res judicata? A res judicata is a determination by a court or tribunal with jurisdiction over the cause of action and the parties, which finally disposes of the issues decided so they cannot be litigated again by those bound, save on appeal. Final judgments entered by default or by consent fall within this concept, whereas rulings on purely procedural points and any decision lacking finality do not. The doctrine’s aim is to bring litigation to an end and shield parties from being harassed by the same dispute twice. in personam—binds the parties and their privies in rem—binds all persons, privy or otherwise (ie a judgment binding the whole world) A party may rely on res judicata: as an estoppel to defeat an opponent’s claim or defence; and/or as the basis of their own claim or
The offence of causing grievous bodily harm with intent Wounding or causing grievous bodily harm (GBH) with intent can be tried solely in the Crown Court on indictment. Elements of the offence Under the Offences against the Person Act 1861 (OATPA 1861), the prosecution must establish that the defendant unlawfully and maliciously: wounded with the intention of causing GBH, or caused GBH with that intention, or wounded intending to resist or prevent the lawful arrest or detention of any person, or caused GBH intending to resist or prevent the lawful arrest or detention of any person ‘Unlawfully’ and ‘maliciously’ Unlawfully The wounding or causing of GBH must be unlawful. Such conduct may be lawful if used: in self-defence in defence of another in defence of property for the prevention of crime where the victim gave express or implied consent For further information on these defences, see below:
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Many family-run businesses often begin with a loosely defined governance set-up; relatives broadly recognise their responsibilities and how they relate to one another, and choices are taken swiftly around the kitchen table at home on a day-to-day basis. By their very nature, these enterprises tend to be informal and adaptable, with objectives shaped by doing what is best for the family in line with its values, rather than solely pursuing the owners’ profit or commercial gain. Yet, as the venture grows and more relatives and other employees come on board, managing the business in this manner becomes progressively harder as operations become more complex over time. This Practice Note examines, in particular, the advantages and disadvantages of formalising the family business, selecting a structure for a family business, and family charters. Formalising the family business—advantages and disadvantages The principal benefit of an informal set-up for a family...
This Practice Note concentrates on health and safety considerations during the due diligence stage of a corporate transaction, as regulatory health and safety duties can carry significant capital expenditure consequences. It should be read alongside the Precedent: Health and safety due diligence questionnaire. Asbestos materials Industrial and manufacturing premises (and at times plant) often contain asbestos. Businesses that control such buildings and plant are legally obliged to manage asbestos. Management—and especially removal—can be extremely costly. See Practice Note: Control of asbestos—duty to manage. A buyer should seek evidence of asbestos surveys for any buildings that pre-date 2000, together with records confirming that higher risk materials have been identified and are being managed appropriately (eg removed or encapsulated). This can include copies of the asbestos register, the asbestos management system, and consignment notes for the disposal of asbestos waste. A well-managed business will have these...
What are the offeror's obligations in relation to the target company's share plan participants? If an offer is made for the shares of a listed company, the offeror must make a suitable offer or proposal to any person who holds rights to subscribe for, or options over, shares of the same class. For employee options, the Panel on Takeovers and Mergers regards it as normal that any offer or proposal should be at least the ‘see through value’ (meaning the offer price minus the exercise price) ( Practice Statement 24, para 2(a)). This obligation covers both employees and former employees of the target group who have outstanding options and awards granted under the target’s employee share plans. All relevant documents, announcements and any other information relating to the offer should, where practicable, be sent to these share award holders at the same time as they are sent to...
This Practice Note sets out: why companies adopt employee ownership models the principal types of share ownership models, and issues to weigh when implementing a share scheme For a more detailed analysis of why companies use share schemes, see Practice Note: Why do companies use share schemes? Why do companies have employee ownership? Employee ownership usually arises in the following situations: business succession or ownership succession — private owners, such as an entrepreneur or a family business, choose to sell all, or more often, part of their shareholdings to their workforce insolvency or closure threat — employee buyouts can be an effective route to recovery for businesses that might otherwise fail independence — companies may determine that a significant, even majority, employee stakeholding will signal and help protect the company’s independence privatisation — the privatisation of various companies has occasionally created opportunities for employee buyouts, and owner vision and...
Dividend A company possesses an implied authority to distribute its profits to its members, unless its articles of association stipulate otherwise. A dividend represents one form of distribution made by a company to its members; indeed, dividends are, in practice, the form of distribution most commonly made by companies. To make a lawful distribution, the company must comply with Part 23 of the Companies Act 2006 ( CA 2006) and with the common law rules on distributions, as those rules are modified by the statutory provisions just mentioned. For discussion of the law and practice applicable to company distributions, see Practice Note: Distributions. For an outline of the consequences of failing to comply with the law on distributions, see Practice Note: Unlawful distributions. In ordinary parlance, ‘dividend’ means a share of profits, whether at a fixed rate or otherwise, allocated to the holders of a...
NOTE: This archived Practice Note outlines the European framework for mergers between companies established in no fewer than two distinct member states of the EEA, as it stood up to the end of the Brexit implementation period. Brexit impact The position of UK companies regarding participation in EU cross-border mergers has been altered as a direct consequence of Brexit. Specifically, once the Brexit implementation period concluded, the Companies ( Cross– Border Mergers) Regulations 2007 (the Regulations) were repealed by the Companies, Limited Liability Partnerships and Partnerships ( Amendment etc.) ( EU Exit) Regulations 2019, SI 2019/348. For further information and context, see the Proposed revocation of the Regulations following Brexit below. For more general details on the effect of Brexit on the UK takeover regime generally, see Practice Note: Brexit— UK takeover...
This Practice Note This Practice Note reviews the range of acts typically undertaken by English law partnerships in the context of finance transactions and sets out the practical steps that can be taken to check and evidence the capacity and authority of an English law partnership. There are two categories of partnership recognised in English law—a general partnership and a limited partnership ( LP). Each is subject to its own legislative regime and associated guidance, as follows: general partnerships are governed by the Partnership Act 1890 ( PA 1890)—see Practice Note: The nature of a general partnership and its legal framework; and limited partnerships are governed by the Limited Partnerships Act 1907 ( LPA 1907)—see Practice Note: The nature of a limited partnership and its legal framework. These are distinct from limited liability partnerships ( LLPs), which are corporate bodies...
Scope of this Practice Note This Practice Note outlines the exemptions from the financial promotion restriction most pertinent to corporate work. For detail on the restriction itself, see Practice Note: The financial promotion regime—essentials. The exemptions addressed here appear in Part VI of the Financial Services and Markets Act 2000 ( Financial Promotion) Order 2005, SI 2005/1529 ( FPO), as amended, including by the Financial Services and Markets Act 2000 ( Claims Management Activity) Order 2018, SI 2018/1253, and the Financial Services and Markets Act 2000 ( Amendment) ( EU Exit) Regulations 2019, SI 2019/632. They cover: transaction-led financial promotions company-focused financial promotions recipient-specific financial promotions A graphic summarises the exemptions within each of these three categories: Financial Promotion Order—groups of exemption. The FPO 2005, SI 2005/1529, sets out more than 70 exemptions available to those who are not PRA/ FCA...
What is a dividend reinvestment plan and why do companies offer them? A dividend reinvestment plan ( DRIP) is an arrangement through which a company—almost always a listed one—provides a service letting shareholders direct their dividends towards purchasing more of its shares. This service is usually operated by an independent administrator. DRIPs are often mentioned alongside scrip dividends (covered in depth in: Tax issues on a scrip or stock dividend) because the end result is very similar: the investor ends up with additional shares rather than a cash payout. Legally, however, they are distinct. Under a DRIP, the shareholder first receives the dividend and elects to deploy the cash to acquire extra shares. Of course, investors could choose to do this themselves without any company-run service. A DRIP merely simplifies the mechanics by ensuring the dividend proceeds flow straight to the...
This Practice Note describes: the meaning of ‘disguised remuneration’ how the disguised remuneration charge operates, and the tax consequences of a disguised remuneration charge This Practice Note is confined to the parts of the disguised remuneration regime that relate to employee share incentives and is not a full commentary on the legislation. The Finance Act 2011 brought in Part 7A of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003), aimed at countering what has come to be widely called ‘disguised remuneration’ via employee benefit trusts. In broad terms, ‘disguised remuneration’ covers arrangements that use third parties (frequently employee benefit trusts) to provide value to employees in a manner that avoids or postpones liabilities to income tax and national insurance contributions ( NICs). The use of a third party is essential for ITEPA 2003, Pt 7A to...
Where an individual or entity (the Buyer) acquires a company, as opposed to buying the assets of a business, they also inherit all historic liabilities of that company and its subsidiaries (together, in this Practice Note, the Company). A Buyer of the Company’s share capital will usually look for the twin safeguards of a suite of tax warranties and a tax covenant from the current owner of those shares (the Seller). The exact scope and level of that protection will, naturally, reflect the parties’ respective negotiating strength. There are three principal reasons for a Buyer to require tax warranties in a share purchase agreement ( SPA): to draw out information by informing and underpinning the due diligence process to guard against unknown tax liabilities of the Company relating to periods before Completion (when the sale is finalised and the shares are...
FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework: In 2027, stamp duty and SDRT are set to be superseded by a single, self-assessed levy on securities—the securities transfer charge ( STC)—which will be paid (and reported) via a new online portal as part of the modernisation programme. Broadly, the STC’s features will reflect the proposals for that tax described in a consultation carried out in 2023; in general terms, its operation is intended to align with those recommendations. Finance Bill 2026 ( FB 2026) creates a power, commencing on Royal Assent, for secondary legislation to let taxpayers pilot the new digital service by self-assessing their stamp taxes on securities obligations and by reporting transactions electronically through a digital service, thereby enabling end-to-end testing. For further information on modernising stamp taxes on securities, see the following: News Analyses: Budget 2025— Tax...
This Practice Note offers practical guidance on executing simple contracts and deeds by third-party individuals or bodies corporate (chiefly companies formed under the Companies Act 2006 ( CA 2006)) acting pursuant to a power of attorney, and outlines how such parties should sign in this context. It considers the following: who can grant a power of attorney, who can act as an attorney, the formalities for executing simple contracts or deeds under a power of attorney. It does not cover: the execution of powers of attorney themselves (see Precedent: Power of attorney for commercial transactions); the execution of documents by other authorised signatories of organisations (see Practice Note: Executing documents—deeds and simple contracts). We have created a comprehensive, interactive collection to help users identify and work through the concepts and common issues when executing documents. Each section or phase contains practical guidance, precedent clauses and Q& As relevant to that section, helping users work...
FORTHCOMING DEVELOPMENT: On 11 February 2019, the Department for Work and Pensions ( DWP) issued its response to the consultation ‘ Protecting Defined Benefit Pension Schemes— A Stronger Pensions Regulator’, which followed the government’s White Paper ‘ Protection Defined Benefit Pension Schemes’ (19 March 2018). Among other measures, the government proposed working with TPR and the PPF to convert the FSD procedure into a single-stage approach, under which the Determinations Panel would impose a specified form and amount of enforceable financial support on a target. It also confirmed the regime would be retitled Financial Support Notice ( FSN). The regime’s reach would be widened to include individual controlling shareholders of the sponsoring employer. The government would likewise pursue the plan to broaden the potential targets of FSD enforcement activity to ensure pension promises are fulfilled. In addition, it signalled an intention to replace the...
Across England and Wales, the Health and Safety Executive ( HSE) and local authorities oversee compliance with health and safety law. For details of how enforcement is carried out, including the HSE’s power to recover the costs of its pre-charge investigations, refer to: Practice Note: Health and Safety Executive prosecutions policy Practice Note: Powers of health and safety inspectors under the Health and Safety at Work etc Act 1974 Practice Note: Improvement and Prohibition Notices under the Health and Safety at Work etc Act 1974 For information on the position in Scotland, see: Scottish health and safety enforcement—overview. Statutory duty to ensure the health, safety and welfare of employees at work Employers are required, so far as is reasonably practicable, to protect the health, safety and welfare of their employees while at work. This obligation is set out in section 2 of the Health and Safety at Work etc Act 1974 (...
This Practice Note sets out the requirements for establishing a general partnership under the Partnership Act 1890 ( PA 1890). It also addresses statutory limits on the partnership’s name, the trading disclosures partnerships must provide, and the duty to prepare and retain partnership accounts. Formation To create a partnership, there is no need to file documents, register details anywhere, or complete other formalities. Two people may form one simply by beginning to run a business together and sharing profits, provided the definition below is satisfied. For an overview, see flowchart: Forming a general partnership—flowchart. For how a partnership may come to an end, see Practice Notes: Ending a general partnership—dissolution otherwise than by the court and Ending a general partnership—dissolution by the court. ‘ Partnership’ is defined in the PA 1890 as ‘the relation which subsists between persons carrying on a business in common with a view of...
ARCHIVED This Practice Note has been archived and is not maintained. This note is for information only and concentrates on the Model Code formerly set out in the Listing Rules, issued by the Financial Conduct Authority ( FCA), which a company with a premium listing of equity shares was previously required to follow. It curtailed dealings in the company’s securities by persons discharging managerial responsibilities. The FCA removed the Model Code following implementation of the Market Abuse Regulation. ICSA, the GC100, the QCA and other market participants released a guidance note and various specimen dealing codes for use by listed and quoted companies from 3rd July 2016. See ICSA, GC100, QCA: Market Abuse Regulation ( MAR) dealing code and policy document. Market Abuse Regulation In November 2015, the FCA issued a consultation paper outlining proposals for amendments to the FCA Handbook needed to implement the EU Market Abuse...
Funding options When establishing a joint venture ( JV), the parties must decide how it will be financed, both at the outset and throughout the life of the arrangement. Although this note focuses on the key funding issues typically arising in corporate JVs, the overarching principles are relevant to all JV structures. The selection of finance methods may turn on: the parties’ commercial aims the comparative resources available to each party whether the parties intend and are able to finance the JV themselves or if external finance will be required, and tax considerations A joint venture company ( JVC) is usually financed, initially and on an ongoing basis, by a combination of the following methods: The joint venture agreement ( JVA) should specify how the JV’s initial and future funding needs will be met......
Introduction This Practice Note examines the policing and enforcement of the UK listing framework by the FCA. It outlines the FCA’s powers over an issuer for contraventions of the UK Listing Rules ( UKLR), the Prospectus Rules: Admission to Trading on a Regulated Market ( PRM), the transparency regime set out in the Disclosure Guidance and Transparency Rules ( DTR), and the obligations to disclose under Articles 17, 18 and 19 of the UK Market Abuse Regulation (disclosure requirements). The role of the FCA The Financial Conduct Authority ( FCA) supervises financial services firms and financial markets in the UK. Its remit, aims, powers and duties are defined in the Financial Services and Markets Act 2000 ( FSMA 2000). FSMA 2000, s 1B provides that the FCA’s overarching strategic objective is to ensure that financial markets function well. The FCA also serves as the UK’s...
Rules and guidance The statutory framework for amending, correcting or revising defective accounts and reports is contained in Part 15 of the Companies Act 2006 ( CA 2006). Detailed rules on the process for companies to revise their accounts and reports under CA 2006 are laid down in the Companies ( Revision of Defective Accounts and Reports) Regulations 2008, SI 2008/373 (as amended) (the 2008 Regulations), made pursuant to CA 2006, s 454. Those 2008 Regulations were later modified by the Companies, Partnerships and Groups ( Accounts and Reports) Regulations 2015, SI 2015/980 ( C, P and G ( Accounts and Reports) Regs 2015). The 2015 instrument implemented chapters 1–9 of the EU Accounting Directive 2013/34/ EU and refreshed and consolidated existing law (including CA 2006) on the form and content of company accounts. The C, P and G ( Accounts and Reports) Regs 2015 took...
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When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...
This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...
Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...
I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...
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